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Carole James speaks about the speculation tax during a visit to Nanaimo in early March.Spencer Sterritt/NanaimoNewsNOW

NANAIMO — B.C.'s Finance Minister was ready to listen, but not ready to change her mind during a meeting with Nanaimo officials on the incoming speculation tax.

Mayor Bill McKay and a pair of senior City staff members met with Carole James on Thursday, July 12 in Victoria, raising a variety of concerns over the NDP's proposed legislation and the negative impact they believed it would have on the Nanaimo region.

In a statement to NanaimoNewsNOW Friday afternoon, James thanked McKay for sharing his City's priorities but said the NDP are not considering exempting Nanaimo from the foreign buyers or speculation tax.

"It appeared clear to us that the Minister was going to proceed as they are now and will monitor the legislation once it has been enacted," McKay told NanaimoNewsNOW.

"It's making a huge swath of people in our region very nervous. It treats Nanaimo differently than the surrounding areas, we're the only community north of the Malahat included. If somebody wants to escape the speculation tax they just simply need to buy a property a few minutes away and that just does not seem right."

When the tax was first introduced, it was to apply to the entire Regional District of Nanaimo. However, Parksville and Qualicum were removed and the scope narrowed to Nanaimo-Lantzville after municipal leaders protested their inclusion.

McKay said the RDN and City created strategies to focus development in urban areas and the province's new tax would in fact push people further outside those zones. He also said the City believed the NDP's decision was based on "inaccurate and scanty" information.

A document provided to NanaimoNewsNOW and presented to the Minister on Thursday stated the City felt the tax would chase away investment and was not based on any supporting evidence.

The document said the City performed an "empty homes" inventory and found "at most 0.6 per cent (146) of homes in Nanaimo may be empty." It also said over the last four years, there was a 63 per cent increase in multi-family units being built in Nanaimo and 65 per cent of all multi-family units built in 2017 were rentals.

The City's data also claimed the local vacancy rate was vastly understated because the numbers used by the province do not include the large amount of townhouses and secondary suites in the rental inventory.

Before the boundaries of the tax were revised in late March, the proponent behind a $30 million hotel expansion in Parksville said their project was in jeopardy because their business model included selling units to out-of-province buyers to finance construction.

McKay said Nanaimo could suffer a similar fate.

"We've got a big vacant piece of land downtown waiting for a hotel. If they try to sell some of it on a strata basis to fund construction, we may find that project will stall or fail because of the speculation tax."

“With a steadily declining rental vacancy rate and noted foreign speculation in Nanaimo, our government has a responsibility to act in the best interests of people living and working in our province," James said in the Friday afternoon statement.

James previously said the tax is intended to improve housing affordability in areas where the need is most acute, while exempting rural cabins and vacation homes.

Areas covered by the tax include Metro Vancouver, Kelowna, West Kelowna, and the Capital Regional District around Victoria.

Canadians living outside B.C. who own a property in these areas will be subject to a one per cent tax based on the assessed value, while foreign owners will pay two per cent. Owners of properties living outside the province can avoid the tax by renting them out.